<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
QUIXOTE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGO]
NOTICE AND AGENDA OF THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD TUESDAY, NOVEMBER 23, 1999
--------------------
TO THE STOCKHOLDERS OF QUIXOTE CORPORATION:
The Annual Meeting of Stockholders of Quixote Corporation (the "Company")
will be held on Tuesday, November 23, 1999, at 10:00 a.m., Central Standard
Time, in the Assembly Room at The Northern Trust Company, 50 South LaSalle
Street, Chicago, Illinois 60675 for the following purposes:
1. To elect two (2) directors to serve for a three-year term expiring at
the Annual Meeting of Stockholders to be held in 2002;
2. To approve an amendment to the Company's 1993 Long-Term Stock Ownership
Incentive Plan;
3. To approve an amendment to the Company's 1991 Director Stock Option
Plan;
4. To ratify the appointment of PricewaterhouseCoopers LLP as the Company's
independent auditors; and
5. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only stockholders of record at the close of business on September 24, 1999,
will be entitled to notice of, and to vote at, the meeting.
Stockholders are encouraged to attend the meeting in person. Whether or not
you attend the meeting, your vote is important. As a cost-savings measure and an
added convenience for the Company's stockholders, we are offering voting by
telephone and the Internet this year. Registered holders and most "street name"
holders will find instructions on the enclosed proxy card. We urge you to use
either of the electronic voting alternatives available, or sign, date and mail
the enclosed proxy card in the envelope provided at your earliest convenience.
No postage is required if mailed in the United States.
WE APPRECIATE YOUR COOPERATION AND WE THANK YOU.
By order of the Board of Directors,
/s/ Joan R. Riley
JOAN R. RILEY
SECRETARY
Chicago, Illinois
October 8, 1999
<PAGE>
I M P O R T A N T
A PROXY STATEMENT AND PROXY CARD ARE SUBMITTED WITH THIS NOTICE. ALL
STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT AND TO VOTE PROMPTLY.
STOCKHOLDERS ARE ENCOURAGED TO VOTE THEIR SHARES ELECTRONICALLY BY FOLLOWING
THE INSTRUCTIONS ON THE PROXY CARD, OR SIGN, DATE AND RETURN THE ENCLOSED
PROXY FORM IN THE ENVELOPE PROVIDED. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES. A LIST OF STOCKHOLDERS ENTITLED TO VOTE AT THE ANNUAL MEETING
WILL BE AVAILABLE FOR INSPECTION BY ANY STOCKHOLDER FOR ANY PURPOSE GERMANE
TO THE MEETING DURING ORDINARY BUSINESS HOURS FOR A PERIOD OF TEN DAYS PRIOR
TO THE MEETING AT THE PRINCIPAL OFFICES OF THE COMPANY, ONE EAST WACKER
DRIVE, 30TH FLOOR, CHICAGO, ILLINOIS.
<PAGE>
[LOGO]
OCTOBER 8, 1999
------------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD TUESDAY, NOVEMBER 23, 1999
--------------------
PROXY SOLICITATION
This Proxy Statement is furnished to stockholders of Quixote Corporation
(the "Company"), on or about October 8, 1999, in connection with the
solicitation of proxies on behalf of the Board of Directors to be voted at the
Annual Meeting of Stockholders on Tuesday, November 23, 1999, at 10:00 a.m.,
Central Standard Time, in the Assembly Room at The Northern Trust Company, 50
South LaSalle Street, Chicago, Illinois 60675, and at any adjournment thereof.
The person voting the enclosed proxy may revoke it at any time before it is
exercised by writing to the Secretary of the Company at its principal office,
One East Wacker Drive, Chicago, Illinois 60601, or by attending the Annual
Meeting and voting in person, in which case any prior proxy given will be
automatically revoked.
Properly executed proxies received prior to the meeting will be voted at the
meeting. If a stockholder designates how the proxy is to be voted on any
business to come before the meeting, the signed proxy will be voted in
accordance with such designation. If a stockholder fails to designate how his or
her proxy should be voted, the signed proxy will be voted: (1) FOR the election
of the nominees named below as Directors; (2) FOR the approval of the amendment
of the 1993 Long-Term Stock Ownership Incentive Plan (the "Long-Term Plan"); (3)
FOR the approval of the amendment of the 1991 Director Stock Option Plan (the
"Director Plan"); and (4) FOR the ratification of the appointment of
PricewaterhouseCoopers LLP as the Company's independent auditors.
The costs of this solicitation will be paid by the Company. Such costs
include preparation, printing and mailing of the Notice of Annual Meeting, Proxy
Card and this Proxy Statement. The officers and employees of the Company and its
subsidiaries may solicit proxies personally or by telephone and facsimile.
Arrangements will be made with brokerage houses and other custodians, nominees
and fiduciaries for proxy material to be sent to the principals, and the Company
will reimburse such persons for their reasonable out-of-pocket expenses. The
Company has also retained the firm of Morrow & Co., Inc. to assist in the
solicitation of proxies at a cost of approximately $7,500 plus reasonable
out-of-pocket expenses.
1
<PAGE>
VOTING AT THE ANNUAL MEETING
Stockholders of record owning the Company's common stock, $.01 2/3 par value
("Common Stock"), at the close of business on September 24, 1999, will be
entitled to vote at the Annual Meeting. On that date, 8,096,916 shares of Common
Stock were outstanding. Each outstanding share of Common Stock entitles the
holder to one vote upon each matter presented at the Annual Meeting. The
affirmative vote of a majority of all of the shares of Common Stock of the
Company present in person or represented by proxy and entitled to vote at the
meeting is necessary to approve the amendment of the Director Plan, the
amendment of the Long-Term Plan, and to ratify the selection of
PricewaterhouseCoopers LLP, as independent auditors for the Company. The
nominees for Director will be elected if they receive the affirmative vote of at
least sixty percent of all votes entitled to be cast at this meeting.
Shares voted as abstentions on any matter (or a "withhold vote for" as to
Directors) will be counted as shares that are present and entitled to vote for
purposes of determining a quorum at the meeting and as unvoted, although present
and entitled to vote, for purposes of determining the approval of each matter as
to which the stockholder has abstained. Abstentions and withheld votes have the
effect of votes against a matter.
Pursuant to the New York Stock Exchange rules, brokers who hold shares of
Common Stock as nominees will have discretionary authority to vote those shares
on the proposals. However, if a broker submits a proxy that indicates the broker
does not have discretionary authority (known as "broker non-votes"), such
non-votes will be counted as shares that are present and entitled to vote for
purposes of determining a quorum at the meeting, but will not be considered as
present and entitled to vote with respect to such matters. Accordingly, broker
non-votes will have the effect of votes against a matter.
While the Notice of Annual Meeting calls for the transaction of such other
business as may properly come before the meeting, management has no knowledge of
any matters to be presented for action by the stockholders except as already set
forth. The enclosed proxy gives discretionary authority to the persons holding
those proxies to vote in accordance with their best judgment as to any other
business.
ELECTION OF DIRECTORS
At the Annual Meeting, two (2) Directors are to be elected to serve three
year terms until the Annual Meeting to be held in 2002 and until their
successors are elected and qualified. The Company is soliciting proxies to vote
for its nominees, Philip E. Rollhaus, Jr. and Leslie J. Jezuit, as Directors of
the Company.
All proxies will be voted in accordance with the stated instructions. If any
nominee ceases to be a candidate for election for any reason, the proxy will be
voted for a substitute nominee designated by the Board. The Board of Directors
currently has no reason to believe that either nominee will be either unwilling
or unable to serve as a Director if elected. Proxies given by stockholders
cannot be voted for more than two (2) persons. The nominees for Director will be
elected if they receive the affirmative vote of at least sixty percent (60%) of
all votes entitled to be cast at this meeting.
INFORMATION CONCERNING NOMINEES FOR DIRECTOR AND DIRECTORS CONTINUING IN OFFICE.
The information appearing in this section in regard to age and principal
occupation or employment has been furnished to the Company by the respective
nominees for Director and by the respective Directors continuing in office.
Information relating to the beneficial ownership of the Company's Common Stock
by Directors and nominees for Director is set forth in the table on page 21.
2
<PAGE>
NOMINEES FOR DIRECTOR FOR A THREE-YEAR TERM
EXPIRING IN 2002
PHILIP E. ROLLHAUS, JR.
Mr. Rollhaus, 65, is Chairman of the Board and has served as a director of
the Company since it was founded in 1969. Mr. Rollhaus also served since 1969 as
Chief Executive Officer of the Company until his retirement from that position
on September 30, 1999 and as President of the Company until Mr. Leslie J.
Jezuit's election to that office in January 1996. Mr. Rollhaus is Chairman and
Chief Executive Officer of Energy Absorption Systems, Inc., a wholly-owned
subsidiary of the Company. Mr. Rollhaus is a former member of the Board of
Directors of the Keller Graduate School of Management and of DeVry, Inc.
LESLIE J. JEZUIT
Mr. Jezuit, 53, was elected Chief Executive Officer of the Company effective
October 1, 1999 and has served as President and Chief Operating Officer of the
Company since January 1996. He is also Vice Chairman and a Director of Energy
Absorption Systems, Inc. Mr. Jezuit has served as a Director of the Company
since May 1997. Prior to joining the Company, Mr. Jezuit served from 1991 to
1995 as President and Chief Operating Officer of Robertshaw Controls Company, a
$500 million manufacturer of HVAC, appliance and pneumatic controls. He also
served as Vice President and General Manager of the Cutler-Hammer division of
Eaton Corporation (1985-1991); in various positions at Federal Signal
Corporation, including Group President and Vice President of Corporate
Development (1980-1985); as Vice President of Marketing at Mead Digital Systems
(1975-1980); and in various management positions at the Graphic Systems Division
of Rockwell International (1968-1975). Mr. Jezuit is a former member of the
Board of Directors of Prospectus Plus, Inc.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE ELECTION OF MR.
ROLLHAUS AND MR. JEZUIT AS DIRECTORS OF THE COMPANY.
DIRECTORS CONTINUING IN OFFICE
JAMES H. DEVRIES
Mr. DeVries, 67, has served as a Director of the Company since July 1969.
Prior to his retirement from the Company in June 1997, Mr. DeVries served as
Executive Vice President, General Counsel and Secretary of the Company, and as
Secretary of Energy Absorption Systems, Inc. His current term as Director
expires at the Annual Meeting to be held in 2000.
LAWRENCE C. MCQUADE
Mr. McQuade, 72, is Chairman of Qualitas International (since 1994). In
addition, he serves as a Director of Bunzl P.L.C. (since 1991), of Oxford
Analytica, Inc. (since 1988) and is a founding partner of River Capital
International L.L.C. Mr. McQuade served as a Director of Eurotech, Ltd. from
1998 to 1999 and as Chairman of the Czech & Slovak American Enterprise Fund from
August 1995 to March 1996. Mr. McQuade was Vice Chairman of Prudential Mutual
Fund Management, Inc. from 1988 through April 1995. He was Executive Vice
President and a Director of W.R. Grace & Co. from 1975 to 1987. In 1967 to 1969
he served as Assistant Secretary, U.S. Department of Commerce. He is a graduate
of Yale University, Oxford University (Rhodes Scholar), and Harvard Law School.
Mr. McQuade has served as a Director of the Company since February 1992 and is a
member of the Audit/ Compensation Committee. His current term as Director
expires at the Annual Meeting to be held in 2000.
3
<PAGE>
WILLIAM G. FOWLER
Mr. Fowler, 71, is of counsel to the law firm of Van Cott, Bagley, Cornwall
& McCarthy of Salt Lake City, Utah. He joined the Board in January 1973. Mr.
Fowler is the Chairman of the Audit/Compensation Committee. His current term as
Director expires at the Annual Meeting to be held in 2001.
ROBERT D. VAN ROIJEN, JR.
Mr. van Roijen, 60, has been the President of Tox Financial Company, a
private investment firm, since 1988. He is also a partner of Patience Partners
LLC, a fund manager, and is a director of St. Leonard's Corporation and Security
Storage Company. Mr. van Roijen was formerly associated with Control Laser
Corporation, serving in various capacities from 1977 to 1987, including as
Chairman of the Board and as President and Chief Executive Officer. Mr. van
Roijen is a former director of Sonex Research, Inc., AMBAR Corp., Commonwealth
Scientific and Applied Digital Technology. Mr. van Roijen has served as a
Director of the Company since May 1993 and is a member of the Audit/Compensation
Committee. His current term as Director expires at the Annual Meeting to be held
in 2001.
AUDIT/COMPENSATION COMMITTEE
The Audit/Compensation Committee recommends the accounting firm to be
employed as the Company's independent auditors to the Board; consults with the
auditors regarding the audit; reviews the auditors' report or proposed report
and resulting letter of comments to management; consults with the auditors and
management regarding the adequacy of internal controls; determines adjustments
to salaries, bonuses and other forms of compensation (including stock option
grants) afforded the principal officers of the Company and its subsidiaries; and
considers any other matter relating to the Company's affairs that the Committee,
in its discretion, deems appropriate. The Audit/Compensation Committee had three
meetings during fiscal 1999. The Board of Directors does not have a nominating
committee. The Board of Directors as a whole performs the functions normally
performed by a nominating committee.
REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS
In fiscal 1999, Directors who were also employees of the Company were paid a
fee of $1,000 for each day of scheduled meetings of the Board, plus expenses.
Non-employee Directors were paid a fee of $2,000 for each day of scheduled
meetings of the Board and the Audit/Compensation Committee, plus traveling and
related expenses, and $500 for each telephone conference meeting. There were
four scheduled meetings (five meeting days) and one telephone conference meeting
of the Board in fiscal 1999. Of the three Audit/Compensation Committee meetings
in fiscal 1999, members of the Committee received compensation for one of those
meetings in addition to the compensation received for their attendance at
scheduled Board meetings. The other two Audit/Compensation meetings were held on
the regularly scheduled Board meeting days.
Present and future Directors are eligible to receive stock options as
granted from time to time by the Board of Directors pursuant to the Director
Plan. Options are granted under the Director Plan at 100% of fair market value
on the grant date and require continued service as a Director for at least one
year from the grant date as a condition of exercise. On November 18, 1998, the
Company granted each of the Directors options to purchase 12,000 shares of
Common Stock at $12.19 per share.
4
<PAGE>
The Company maintains accidental death and disability insurance coverage in
the amount of $500,000 on behalf of each of the non-employee Directors, payable
to the designated beneficiary of each Director. The Company paid premiums of
$248 for each Director to provide such insurance in fiscal 1999.
SUMMARY COMPENSATION TABLE
The following table summarizes the total compensation earned or paid for
services rendered in all capacities during each of the years ended June 30,
1999, 1998 and 1997, by the named Executive Officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
--------------------------------------- ----------------------------------------
OTHER RESTRICTED
ANNUAL STOCK OPTIONS/ ALL OTHER
SALARY BONUS COMPENSATION(1) AWARD(S)(2) SARS COMPENSATION(3)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($)
- --------------------------------------------- ---- ------- ------- --------------- ----------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Philip E. Rollhaus, Jr ...................... 1999 465,000 265,000 163,637 122,700 37,000 6,500
Chairman and Chief Executive Officer, 1998 445,000 240,000 140,213 169,200 60,000 5,000
Quixote Corporation and Energy Absorption 1997 425,000 100,000 280,072 196,875 32,000 3,200
Systems, Inc. (4)
Leslie J. Jezuit ............................ 1999 310,000 225,000 151,196 110,430 32,000 6,600
President and Chief Operating Officer, 1998 290,000 210,000 152,515 644,972 54,445 5,000
Quixote Corporation; Vice Chairman, Energy 1997 275,000 100,000 177,501 157,500 25,000 3,200
Absorption Systems, Inc. (5)
George D. Ebersole (Retired December 31, 1999 117,500 0 28,000 0 0 89,128
1998) ...................................... 1998 225,000 120,000 54,571 0 25,000 4,007
President and Chief Operating Officer, 1997 215,000 75,000 32,825 0 10,000 3,050
Energy Absorption Systems, Inc. (6)
Daniel P. Gorey ............................. 1999 175,000 90,000 102,873 49,080 18,000 6,437
Vice President, Chief Financial Officer and 1998 165,000 80,000 89,772 42,300 30,000 5,737
Treasurer 1997 155,000 40,000 137,727 500,323 15,000 1,674
Joan R. Riley ............................... 1999 135,000 50,000 43,376 24,540 12,000 6,308
General Counsel and Secretary (7) 1998 125,000 45,000 46,117 356,996 18,000 5,495
</TABLE>
- ------------------------------
(1) The amounts disclosed include (a) cash paid under the Quixote Corporation
Long-Term Stock Ownership Incentive Plan (the "Long-Term Plan") to cover the
federal, state and other taxes arising from the restricted stock issued in
the fiscal year to the named Executive Officers pursuant to the Long-Term
Plan and, (b) cash paid to cover the federal, state and other taxes arising
from a restricted stock award granted on February 18, 1999 to Messrs.
Rollhaus, Jezuit, Gorey and Ms. Riley for their work related to the
Company's discontinued operations. The amounts disclosed for Messrs.
Rollhaus and Jezuit also include compensation of $5,000 paid to them for
their services as Directors of the Company. Perquisites and other personal
benefits are disclosed for Mr. Rollhaus, which includes an automobile
allowance of $36,786 and for Mr. Gorey, which includes an automobile
allowance of $14,910 and $12,790 in medical reimbursements under the
Company's Exec-U-Care Plan. The aggregate amount of perquisites and other
personal benefits for Messrs. Jezuit, Ebersole and Ms. Riley did not exceed
the lesser of $50,000 or ten percent (10%) of the total annual salary and
bonus reported for each of them and, therefore, is not included.
(2) For fiscal year 1999, the amounts disclosed for Messrs. Rollhaus, Jezuit,
Gorey and Ms. Riley include the dollar value of stock awards granted to them
on February 18, 1999. The fair market value on the date of grant was $12.27
per share. The total number of shares awarded are as follows: Mr. Rollhaus -
10,000 shares; Mr. Jezuit - 9,000 shares; Mr. Gorey - 4,000 shares; Ms.
Riley - 2,000 shares. The restricted shares are fully vested, and were
subject to transfer restrictions until August 18, 1999 at which time they
became unrestricted shares. Dividends were paid on the restricted stock.
Restricted stock awards under the retirement provisions of the Long-Term
Plan were granted to Messrs. Rollhaus and Ebersole in 1993, to Mr. Gorey in
1997 and Mr. Jezuit and Ms. Riley in 1998. The number of shares covered by
these restricted stock awards and the number of shares vested, respectively,
are as follows: Mr. Rollhaus - 91,530/91,530 shares; Mr. Ebersole -
37,037/31,746 shares; Mr. Jezuit - 63,384/11,524 shares; Mr. Gorey -
51,409/8,568 shares; Ms. Riley - 39,161/4,352 shares. The remaining
restricted stock covered by the awards granted to Mr. Jezuit, Mr. Gorey and
Ms. Riley will be issued in equal annual installments on June 30 of the next
nine, fifteen, and sixteen years, respectively, subject to the continuation
of employment and transferability restrictions described below, and subject
to the Company's right to terminate
5
<PAGE>
Mr. Jezuit's and Ms. Riley's agreement at any time after July 1, 2003 and,
in the case of Mr. Gorey, at any time after July 1, 2002. Mr. Ebersole
forfeited his final issuance of 5,291 shares upon the cessation of his
employment in December 1998 and all share restrictions lapsed on that date.
In order to receive an annual issuance of restricted stock, the executive
must be employed by the Company or its subsidiaries on the last day of the
fiscal year in which such stock issued (except in the case of his death,
disability or termination of employment other than for cause). The executive
may not sell or transfer any restricted stock received under the Long-Term
Plan until the earlier of the date his employment is terminated or the date
he reaches retirement age (whether he actually retires at that time or not).
Pursuant to the terms of the Long-Term Plan, dividends are paid only on
shares of restricted stock issued and delivered to the named Executive.
The number and value of each employee's aggregate restricted stock holdings,
as of June 30, 1999 were as follows: Mr. Rollhaus - 101,530/$1,237,397; Mr.
Jezuit - 20,524/$250,136; Mr. Gorey - 12,568/$153,173; Ms. Riley -
6,352/$77,415.
(3) Amounts shown for Messrs. Rollhaus, Jezuit, Gorey and Ms. Riley for fiscal
1999 are matching contributions by the Company under the Company's 401(k)
Plan. The amount shown for Mr. Ebersole includes the Company's matching
contribution of $1,592 under the Company's 401(k) Plan. In connection with
his retirement, Mr. Ebersole also received a vacation accrual payment of
$22,510 and $65,026, the cash value of the shares he forfeited under the
retirement provisions of the Long-Term Plan, which payments are also
included in the amount shown.
(4) Mr. Rollhaus retired from his position as Chief Executive Officer of the
Company on September 30, 1999.
(5) Mr. Jezuit was elected Chief Executive Officer of the Company effective
October 1, 1999.
(6) Mr. Ebersole retired from his position with the Company on December 31,
1998.
(7) Ms. Riley was designated an Executive Officer of the Company in August,
1998.
STOCK OPTION GRANTS IN FISCAL YEAR 1999
The following table shows the options granted to the named Executive
Officers during fiscal 1999 and the potential realizable value of those grants
(on a pre-tax basis) determined in accordance with SEC rules. The information in
this table shows how much the named Executive Officers may eventually realize in
future dollars under three hypothetical situations: if the price of the
Company's Common Stock does not increase, and if the stock gains 5% or 10% in
value per year, compounded over the life of the options. These amounts represent
assumed rates of appreciation, and are not intended to forecast future
appreciation of the Company's Common Stock.
The options described in this table have exercise prices equal to the
current market value of a share of Common Stock on the date they were granted.
Unless the Company's stock price appreciates and the recipient continues to be
employed until the options vest, the options will have no value.
6
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------- POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
OPTIONS ANNUAL RATES OF STOCK
GRANTED TO EXERCISE PRICE APPRECIATION
OPTIONS EMPLOYEES OR BASE FOR OPTION TERM(2)
GRANTED IN FISCAL PRICE EXPIRATION ---------------------
NAME (#)(1) YEAR ($/SH) DATE 0% 5%($) 10%($)
- -------------------------------------------------- ------- ---------- -------- ----------- ---- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Philip E. Rollhaus, Jr............................ 25,000 11.3% 12.19 11/18/03 0 84,197 186,053
12,000 5.4% 12.19 11/18/08 0 91,995 233,133
Leslie J. Jezuit.................................. 20,000 9.0% 12.19 11/18/03 0 67,357 148,842
12,000 5.4% 12.19 11/18/08 0 91,995 233,133
George D. Ebersole (Retired December 31, 1998).... 0 0 0 0 0 0 0
Daniel P. Gorey................................... 18,000 8.1% 12.19 11/18/03 0 60,622 133,958
Joan R. Riley..................................... 12,000 5.4% 12.19 11/18/03 0 40,414 89,305
</TABLE>
- ------------------------------
(1) The options which expire on November 18, 2003 were granted on November 18,
1998 under the Long-Term Plan and the options which expire November 18, 2008
were granted on the same date under the Director Plan. All options were
granted at the Current Market Price (as defined in the Plans) on such dates.
The options become exercisable in one-third installments, beginning one year
after grant except for the options granted to Mr. Rollhaus under the
Long-Term Plan which become exercisable in one-half installments beginning
one year after grant. All option rights under the Long-Term Plan lapse upon
termination of employment except for limited exercise periods. In the event
of a change in control of the Company (as defined in the Long-Term Plan and
Director Plan), the Plans give each optionee the right, within 30 days of
such change in control, to exercise his options, notwithstanding the other
provisions of the Plans.
(2) The potential realizable value to all stockholders at the appreciation rates
of 0%, 5% and 10% would be $0, $27,179,034 and $60,058,558 (based on shares
outstanding at June 30, 1999 and assuming such shares were purchased for
$12.1875 on June 30, 1999 and held until June 30, 2004).
AGGREGATED OPTION EXERCISES AND OPTION VALUES TABLE
The following table shows information concerning the exercise of stock
options by each of the named Executive Officers during fiscal 1999, and the
value of all remaining exercisable and unexercisable options at June 30, 1999,
on a pre-tax basis.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS/ SARS
OPTIONS/SARS AT 6/30/99(#) AT 6/30/99($)(1)
SHARES ACQUIRED VALUE REALIZED ---------------------------- --------------------------
NAME ON EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------- --------------- --------------- ----------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Philip E. Rollhaus, Jr............... 93,667 462,096 129,000 62,833 344,724 82,988
Leslie J. Jezuit..................... 0 0 110,298 56,147 443,988 57,201
George D. Ebersole................... 23,334 140,420 0 0 0 0
Daniel P. Gorey...................... 4,925 26,663 29,000 31,000 107,058 51,718
Joan R. Riley........................ 1,925 2,888 25,334 19,666 110,636 11,164
</TABLE>
- ------------------------------
(1) Based on the closing price of the Company's Common Stock as reported on the
NASDAQ-NMS on June 30, 1999 ($12.1875).
EMPLOYMENT AGREEMENTS AND TERMINATION BENEFITS
The Company had an employment agreement with Philip E. Rollhaus, Jr. during
fiscal year 1999, which expired September 30, 1999. In addition to providing for
the payment of a base annual salary and other employee benefits, that employment
agreement provided for
7
<PAGE>
special separation pay and benefits in the event of termination of his
employment under certain circumstances. Effective October 1, 1999, the Company
entered into a new employment agreement with Mr. Rollhaus, which will expire on
June 30, 2000 unless the Company terminates it earlier for cause or disability.
The new employment agreement provides for payment of an annual salary of
$275,000 and other executive employee benefits. The Company also has an
employment letter agreement with Leslie J. Jezuit which provides for the payment
of one year's base salary, payable monthly, if his employment is terminated for
any reason other than cause.
The Company also has a change of control agreement with each of Philip E.
Rollhaus, Jr., Leslie J. Jezuit, Daniel P. Gorey and Joan R. Riley that were
entered into as of December 1, 1997 (the "Change of Control Agreements"). The
Board of Directors believes that the Change of Control Agreements assure fair
treatment of the Executive Officers in relation to their careers with the
Company by assuring them of some financial security. The Agreements also protect
the stockholders by encouraging the Executive Officers to continue their
attention to their duties without distraction in a potentially disturbing
circumstance and neutralizing any bias they might have in evaluating proposals
for the acquisition of the Company. The Change of Control Agreements provide if,
within three (3) years after a change of control of the Company, the employment
of the executive is terminated other than (i) by death or disability, (ii) by
the Company or employing subsidiary for cause, or (iii) by the executive's
voluntary resignation not constituting a constructive termination as defined in
the Agreement, the Company will pay the executive a separation payment equal to
300% of the sum of his base salary and average yearly bonus payment for the last
two years. The Agreements define a "change of control" as a change in the stock
ownership of a magnitude which requires the filing of reports under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). For the
purposes of the Agreements, a "change of control" shall be deemed to have
occurred if any of the following occur: (i) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the beneficial
owner of securities of the Company representing 20% or more of the combined
voting power of the Company's then outstanding securities; (ii) if during any
period of two consecutive years, there is a change in the composition of the
Board of Directors of the Company such that 50% of the non-employee Board
members have not been slated by the Board; (iii) a consolidation or merger
occurs and the Company is not the surviving company or the Company sells all or
substantially all of its assets; or (iv) the Company is liquidated or dissolved.
The term "constructive termination" is generally defined by the Agreements to
mean any unfavorable change in the executive's or employee's position, duties,
compensation or benefits and "cause" is generally defined as willful conduct of
an executive or employee demonstrably injurious to the Company or employing
subsidiary. The Agreements also contain provisions for the payment of legal
expenses incurred by the executives and the employees as a result of any
termination of employment after a change in control.
REPORT OF THE AUDIT/COMPENSATION
COMMITTEE ON EXECUTIVE COMPENSATION
The Audit/Compensation Committee (the "Compensation Committee" or
"Committee") of the Board of Directors of the Company, is composed of three
independent, non-employee Directors. It is responsible for reviewing the
recommendations of the Chairman and Chief Executive Officer and the President
and Chief Operating Officer and determining the compensation and other
remuneration afforded the officers of the Company, collectively referred to as
the "Executive Officers" or the "Officers." Executive compensation
determinations of the Committee are reviewed and subject to approval by the
entire Board. Action regarding awards under the 1993 Long-Term Stock Ownership
Incentive Plan (the "Plan") are made solely by the Compensation Committee in
compliance with Rule 16b-3 of the Securities Exchange Act.
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COMPENSATION PRINCIPLES AND POLICIES OF THE COMPANY
The Compensation Committee ensures that the Executive Officers of the
Company are fairly compensated in accordance with the philosophy and policies of
the Company. The Company philosophy, as implemented by the Committee, is
calculated to grow the Company and enhance stockholder value. In evaluating
management's performance in implementing these objectives, the Compensation
Committee considers the Company's financial performance as well as the
attainment of strategic goals.
The Company's performance in fiscal 1999 was record-breaking. Record sales
and earnings from continuing operations for the fiscal year showed sales
increasing 29% and earnings from continuing operations increasing 23% from the
prior year. Much of the Company's record performance reflected strong internal
growth from the solid contributions of its subsidiaries.
In addition to the Company's performance, the Compensation Committee
evaluates management's performance in dealing with competition and economic
issues, as well as attaining the Company's near and long-term strategies and
goals. Accordingly, the attainment of strategic objectives and tangible
financial results are a significant part of the Committee's evaluation process.
During fiscal 1999, the Board and management continued to implement the restated
corporate goal of consolidating and expanding the Company's highway and
transportation safety business. This included several noteworthy
accomplishments, including an increase in international sales of 40% and the
acquisition of Nu-Metrics, Inc., which expanded the Company's presence in the
intelligent transportation systems market.
The Committee regularly engages the services of an independent compensation
consultant to evaluate compensation levels and to advise it regarding
competitive influences as well as the practices of peer entities regarding
compensation policies.
The Company's compensation program includes base salary and the
consideration of annual cash bonus and stock option awards. All three components
are material and interrelated in determining the total compensation of
executives. This program provides incentives compatible with near and long-term
management goals of the Company and its competitiveness in the marketplace,
while recognizing individual performance. Cash bonuses and stock options are
meant to provide additional compensation to Executive Officers in recognition of
their individual achievements. The Executive Officer group owns approximately
432,036 shares of Company Common Stock, or an average of about 108,009 common
shares per Executive Officer.
From time to time, the Compensation Committee will consider special
achievements for consideration and recognition. In fiscal 1999, in addition to
meeting or exceeding most corporate forecasts, management also resolved
favorably all major litigation which arose from discontinued operations and
disposed of the Huntsville, Alabama plant for $6,709,000.
BASE SALARY AND ANNUAL BONUS
The annual review and adjustments, as appropriate, of each officer's base
salary takes into account the officer's performance as well as substantive
assessments of the officer's responsibilities. The review also takes into
consideration competitive opportunities for executives both within and without
the Company's industry as well as the Company's desire to motivate its
executives towards greater duties and responsibilities.
The increased levels of revenue and earnings for 1999 are in large part
attributable to management's skill and dedication, complemented by the
introduction of new products and acquisitions, justifying the Committee's
recommendations, and the Board's approval, of reasonable cost-of-living
adjustments to the executive salaries and cash bonuses fairly reflective of
these enhancements. The salary adjustments and cash bonuses also recognized the
increased
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responsibilities and duties placed upon the Executive Officers by the retirement
of George Ebersole as President of Energy Absorption Systems, Inc. in fiscal
1999. Accordingly, Mr. Rollhaus' salary was increased from $465,000 in fiscal
1999 to $485,000 in fiscal 2000 and he received a cash bonus of $265,000.
Although not occurring until fiscal 2000, it should be brought to the
attention of stockholders that Mr. Rollhaus, founder, Chairman of the Board and
Chief Executive Officer who has directed the management team through all 30
years of the Company's existence, will retire from his management role effective
September 30, 1999, the month in which he attains the age of 65. The Company has
benefited greatly from his leadership. He will continue to serve as Chairman of
the Board. In keeping with the Board's succession plans, Mr. Jezuit, the Company
President and Chief Operating Officer, will become Chief Executive Officer
effective October 1, 1999. Mr. Rollhaus will continue to serve as an employee of
the Company at a substantially reduced salary.
STOCK OPTIONS
The Company, pursuant to its philosophy and policy, utilizes stock options
which are granted pursuant to the Plan. Stock options are universally accepted
as an incentive to increase the Company's value. Options generally vest over a
three-year period and are exercisable over a specified period of time following
the date of grant, which is typically five years. Option recipients must be
employed by the Company at the time of vesting and at the time the options are
exercised. The Company cannot attract and retain highly talented and qualified
management employees without granting stock options. For the last three fiscal
years, the Company has granted options to employees to purchase an annual
average of 189,000 shares at the current market price on the date of grant.
Under the Plan, current market price is determined by the average of the daily
closing prices for Quixote common stock for the 30 business days preceding the
date of grant. In fiscal 1999, the Committee granted Mr. Rollhaus employee stock
options to purchase 25,000 shares of the Company's Common Stock at the
then-current market value of the stock. This was a discretionary assessment of
his future role in contributing to the long-term growth of the Company and as an
incentive to insure his strong interest in providing the enhancement of the
stock's value.
STOCK BASED RETIREMENT PLAN
The Company maintains a stock-based retirement plan (the "Retirement Plan"),
which is a component of the Plan and was approved by the stockholders in 1993 to
provide its executives with a competitive retirement program.
Under the Retirement Plan, which is in lieu of any supplemental executive
retirement program, the Compensation Committee makes annual awards of restricted
Company stock to selected key executives. The share awards, together with a cash
award intended to cover the concomitant income tax burden, are calculated under
accepted actuarial principles as the number required to provide a targeted
competitive retirement benefit. The targeted benefit, however, will be achieved
at retirement only if the value of the Company's stock grows at a sustained
compounded level established by the Board. Furthermore, in order to receive each
year's award, the executive must remain in the employ of the Company through the
end of the fiscal year in which it is awarded (except in the case of the
Officer's death, disability or termination of employment other than for cause
during that year), and he or she must have retained all restricted shares
previously awarded under the Retirement Plan. The Compensation Committee
believes that the Retirement Plan mutually benefits the Company, its
stockholders and its most senior executives. Mr. Rollhaus received his final
restricted stock and cash awards in fiscal 1997 and will receive no additional
awards under the Retirement Plan.
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OTHER COMPENSATION
For fiscal 1999, the Committee recommended, and the Board approved, a stock
award at the market price of $12.27. The award recognized the work of four
senior executives which resolved the remaining major issues related to the
Company's discontinued operations, including the resolution of two major patent
lawsuits, the resolution of almost all repetitive stress injury litigation, and
the sale of the Huntsville, Alabama plant. Mr. Rollhaus received a stock award
of 10,000 shares.
The Company has an Incentive Savings Plan (the "Plan") which offers all
employees (subject to certain eligibility requirements), including the named
Executive Officers, tax advantages pursuant to Section 401(k) of the Internal
Revenue Code. On January 1, 1999, the Company increased its matching
contribution to the Plan from $.50 to $.60 on each dollar of the first 7% of
compensation contributed by the participant, subject to legal maximums imposed
by the Internal Revenue Code. Contributions are made by participants by means of
a payroll deduction program. The total aggregate amount of the Company's
matching contribution for the named Executive Officers is included in the
Summary Compensation Table on page 5.
The Company maintains an Exec-U-Care Medical Reimbursement Plan which
provides additional health and life insurance protection for certain Officers of
the Company and its subsidiaries, in addition to the group health and life
insurance policies provided to all employees. The participants in the
Exec-U-Care Plan include Messrs. Rollhaus, Jezuit, Gorey and Ms. Riley. The
total aggregate cost to the Company during fiscal year 1999 under the Plan for
those Executive Officers was less than $30,000.
LIMITATION ON DEDUCTIBILITY OF COMPENSATION
In 1993, the tax laws were amended by the addition of Section 162(m) of the
Internal Revenue Code. Effective for fiscal years beginning after 1993, that
Section limits the deductibility of compensation paid by a publicly-held company
to its chief executive officer and to the four other Officers who are most
highly compensated. Generally, amounts paid in excess of $1 million to a covered
executive, other than performance-based compensation, cannot be deducted. No
Executive Officer other than Mr. Rollhaus was affected by this limitation in
fiscal 1999.
AUDIT/COMPENSATION COMMITTEE
William G. Fowler, Chairman
Lawrence C. McQuade
Robert D. van Roijen, Jr.
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are William G. Fowler, who
serves as Chairman, Lawrence C. McQuade and Robert D. van Roijen, Jr. There are
no Compensation Committee interlocks as defined by the SEC rules.
COMMON STOCK PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG QUIXOTE CORPORATION, THE RUSSELL 2000 INDEX AND
THE NASDAQ NON-FINANCIAL INDEX AND
The following graph compares the five year cumulative total return of the
Company's Common Stock with the Russell 2000 Index and the Nasdaq Non-Financial
Index, assuming the investment of $100 on June 30, 1994 and the reinvestment of
dividends.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG QUIXOTE CORPORATION, THE RUSSELL 2000 INDEX AND
THE NASDAQ NON-FINANCIAL INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
QUIXOTE CORPORATION RUSSELL 2000 NASDAQ NON-FINANCIAL
<S> <C> <C> <C>
6/94 $100 $100 $100
6/95 $62 $120 $137
6/96 $34 $149 $174
6/97 $42 $173 $205
6/98 $66 $206 $268
6/99 $67 $206 $394
</TABLE>
* $100 INVESTED ON 6/30/94 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING JUNE 30.
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CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS
See "Employment Agreements and Termination Benefits" and the "Summary
Compensation Table" for a description of certain transactions and business
relationships involving management of the Company.
APPROVAL OF THE AMENDMENT
OF THE QUIXOTE CORPORATION
1993 LONG-TERM STOCK OWNERSHIP INCENTIVE PLAN
The Board of Directors has adopted, subject to approval of the stockholders,
an amendment to the 1993 Long-Term Stock Ownership Incentive Plan (the
"Long-Term Plan"). The amendment increases the aggregate number of shares
available for grant under the Long-Term Plan from 1,280,000 shares to 1,545,000
shares, an increase of 265,000 shares, in order to assure that an adequate
number of shares is available for grant during the remainder of the term of the
Long-Term Plan. There are currently no shares available for option grants under
the Long-Term Plan. The Long-Term Plan expires June 30, 2003, except that
options may not be granted after August 19, 2001. No other amendment is being
made to the Long-Term Plan.
On September 10, 1999, the Board of Directors approved an amendment to the
Long-Term Plan which deleted a provision that allowed the Compensation Committee
to reprice options to specify a lower price. The effect of the amendment is to
prohibit repricing without stockholder approval. Stockholder approval was not
required for this amendment.
The purpose of the Long-Term Plan is to advance the growth and prosperity of
the Company and its subsidiaries by providing officers and key employees with
additional incentives. The Company's Board of Directors as well as the
Compensation Committee believe that the Company's future success and
profitability will depend to a great extent on its ability to continue to
attract, retain and motivate highly qualified individuals and that an effective
compensation policy for these individuals includes not only a competitive annual
salary, but also long-term incentives linked to stockholder return and Company
performance. The Company believes an important role is played by stock-based
incentives in retaining the services of outstanding personnel and in encouraging
such employees to have greater personal financial investment and stock ownership
in the Company.
Because the granting of Options (as defined below) and other Awards (as
defined below) under the provisions of the amended Long-Term Plan will continue
to be entirely in the discretion of the Audit/Compensation Committee, it is not
possible to designate the employees to whom Awards will be granted under the
amended Long-Term Plan or the number of shares to be covered by such Awards. It
is expected that the aggregate number of persons eligible to participate under
the Long-Term Plan will not exceed 50. Grants of Awards under the Long-Term Plan
made during the year ended June 30, 1999 are shown in the table on page 7.
The following is a summary of the principal provisions of the Long-Term
Plan. Capitalized terms used in this summary which are not defined herein have
the meanings ascribed to them in the Long-Term Plan. A copy of the Long-Term
Plan will be available at the forthcoming Annual Meeting of Stockholders or in
advance of the meeting to any stockholder to whom this Proxy Statement is
furnished upon written or oral request directed to: Joan R. Riley, Secretary,
Quixote Corporation, One East Wacker Drive, Chicago, Illinois 60601; telephone
number (312) 467-6755.
GENERAL INFORMATION
The Long-Term Plan provides for the granting of stock options and retirement
awards (payable in cash and stock) (collectively, the "Awards"). Such Awards,
which will expire not
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more than 10 years after their respective Grant Dates, may be granted alone or
in conjunction with one or more other Awards.
Options may be granted to any employee (including officers) of the Company
or of any of its subsidiaries. Retirement Awards (as defined below) may be
granted only to key executives who have completed ten (10) years of continuous
service for the Company or its subsidiaries although the Audit/Compensation
Committee may, in its discretion, waive the ten (10) year service requirement
under appropriate circumstances.
SCOPE OF THE LONG-TERM PLAN
The Long-Term Plan provides that an aggregate of 1,280,000 shares of the
Company's Common Stock are available and reserved for delivery on account of
Awards and the exercise of Awards, with 930,00 shares of Common Stock available
and reserved for delivery on account of options and 350,000 shares of Common
Stock available and reserved for delivery on account of Retirement Stock Awards
(as defined below). If any Award expires or terminates without having been
exercised or distributed in full or is forfeited, the shares of Common Stock
associated with such expired or terminated Award shall become available for
other Awards. The amendment adds 265,000 shares of the Company's Common Stock to
the Long-Term Plan, with all of those shares of Common Stock reserved and
available for delivery on account of options.
Common Stock issued under the Long-Term Plan may be either newly issued
shares, shares purchased on the open market, treasury shares or any combination
thereof. In addition, certain benefits under the Long-Term Plan may be payable
in cash.
PLAN ADMINISTRATION
Except for certain duties and responsibilities expressly reserved by the
Board or delegated to another committee pursuant to the terms of the Long-Term
Plan, the Long-Term Plan will be administered by a committee of the Board
composed of not less than three directors who are not employees of the Company
(the "Committee"). The Committee under the Long-Term Plan is the
Audit/Compensation Committee, whose members are identified on page 12.
Among other things, the Committee has exclusive discretion (subject to the
provisions of the Long-Term Plan): to select the persons to whom, and the times
when, Awards are to be granted, as well as the type, size and terms of such
Awards; within certain limits, to modify the terms of any Award which has been
granted; to interpret the Long-Term Plan and prescribe rules and regulations
thereunder; to accelerate the exercisability of, and to waive the restrictions
and conditions applicable to, Awards; and, subject to certain restrictions, to
extend the time during which Awards may be exercised, but not beyond 10 years
after the Grant Date of an Award. The determinations of the Committee are
conclusive and final. No Committee member is liable for any action or
determination made in good faith.
AWARDS UNDER THE LONG-TERM PLAN
STOCK OPTIONS. The Long-Term Plan provides both for incentive stock options
("ISOs") specifically tailored to the provisions of the Internal Revenue Code of
1986 (the "Code") and for options not qualifying as ISOs ("Non-Qualified
Options"), each of which may (but need not) be granted in conjunction with other
Awards.
Pursuant to the Long-Term Plan, the Committee shall determine the exercise
price to be paid by an optionee (the "Option Price") for each share issued in
connection with an ISO or a Non-Qualified Option (collectively referred to as
"Options"). The Option Price cannot be less than 100% of the Current Market
Value of the Common Stock on the Grant Date. Payment of the Option Price may be
made in cash or through the exchange of Common Stock
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<PAGE>
held by the optionee for at least six months. The Committee may allow a grantee
to use a Company loan to fund the amounts needed for the Option Price.
The fair market value of ISOs granted under the Long-Term Plan and
exercisable for the first time by a grantee during a particular calendar year
shall not exceed, in the aggregate, $100,000. Such fair market value shall be
determined as of the date on which the ISOs are granted. Non-Qualified Options
are not subject to this restriction.
If an optionee ceases to be employed by the Company or any subsidiary for
any reason other than his death, total disability or retirement, the optionee
may, at the discretion of the Committee, be granted the right to exercise any
Option at any time within thirty (30) days after such termination, to the extent
the right to exercise such option has accrued, such Option has not previously
been exercised and such Option has not expired; PROVIDED, HOWEVER, that if the
optionee's employment is terminated by the Company or any subsidiary for cause,
fraud, breach of fiduciary duty, or other dishonesty, the optionee's rights to
exercise any option shall expire on the last day of his employment. If an
optionee retires and such optionee has been in the employ of the Company or a
subsidiary continuously from the date such Option was granted until retirement,
the optionee may, within the three (3) month period after such retirement,
exercise such Option to the extent that such three month period is included in
the remainder of the applicable Option's term. If an optionee dies or becomes
totally disabled while employed by the Company or a subsidiary and previously
has not fully exercised his or her Options, his or her Options may be exercised
to the extent that those Options had not previously been exercised, at any time
within one year after his death or disability (absent earlier expiration of the
Option) by the optionee or his legally appointed guardian, in the case of
disability, or in the case of an optionee's death, by the executors or
administrators of his or her estate or the person who acquires the Option
directly from the optionee by bequest or inheritance.
RETIREMENT AWARDS. Under the Long-Term Plan, the Committee may make awards
of Company Common Stock ("Retirement Stock Awards") and cash sufficient to pay
the federal, state and other taxes arising from such awards ("Retirement Cash
Awards") to provide a retirement benefit for senior executives of the Company
and its Subsidiaries. The Retirement Stock Awards and Retirement Cash Awards are
collectively referred to as "Retirement Awards".
Each Retirement Award is made pursuant to a written agreement between the
Company and the executive which provides for the award of a set aggregate amount
of Retirement Stock to be issued in at least five equal annual installments,
together with a Retirement Cash Award in an amount to be calculated annually in
accordance with a formula determined by the Committee and set forth in the
agreement. Dividends are paid only on Retirement Stock which has been issued and
delivered to an executive. In order to receive an annual issuance of a
Retirement Award, the executive must be employed by the Company or its
Subsidiaries on the last day of the Company's fiscal year in which such stock is
issued except in case of death, disability or termination of employment other
than for cause. The executive may not sell or transfer any Retirement Stock he
receives while he is employed by the Company or its Subsidiaries. The transfer
restrictions lapse on the earlier of the date (i) when the executive's
employment is terminated or (ii) when the executive reaches his normal
retirement age, regardless of whether he actually retires at that time.
AMENDMENT AND TERMINATION
The Long-Term Plan terminates on the tenth anniversary of its effective
date, but Options may not be granted under the Long-Term Plan after August 19,
2001. The Board of Directors may from time to time, insofar as permitted by law,
suspend, revise or amend the Long-Term Plan in any respect whatsoever except
that, without the approval of the stockholders, no such
15
<PAGE>
revision or amendment shall: (1) change the number of shares subject to the
Long-Term Plan; (2) change the designation of the class of employees eligible to
receive Awards; (3) decrease the price at which Options may be granted; (4)
remove the administration of the Long-Term Plan from the Committee; (5) render
any Committee member eligible to receive an Award under the Long-Term Plan while
serving on the Committee; (6) extend the period during which Awards may be
granted; or (7) amend the Long-Term Plan in any manner that will cause the
Options issued under it to fail to qualify as ISOs. The Board of Directors is
specifically directed to revise, modify or amend the Long-Term Plan, without the
approval of the stockholders, as may be necessary to satisfy the requirements of
the Internal Revenue Code, as amended, to assure that the Options granted
thereunder may be treated as ISOs. Termination of the Long-Term Plan will not
affect any Awards then outstanding.
OTHER TERMS AND CONDITIONS
For purposes of the Long-Term Plan, the "Current Market Price" of the
Company's Common Stock is the average of the daily closing prices for such
Common Stock for the thirty (30) business days preceding the referenced date.
Awards granted under the Long-Term Plan will be evidenced by written
agreements consistent with the Long-Term Plan in such form as the Committee may
prescribe. Neither the Long-Term Plan nor such agreements confer any right to
continued employment upon any grantee.
Awards (other than shares of Retirement Stock) are generally
non-transferable other than by will or the laws of descent and may be exercised,
during a grantee's lifetime, only by the grantee. Restrictions with respect to
Retirement Stock are described above.
Adjustments in the amount of Awards issuable under the Long-Term Plan and in
any Awards outstanding may be made in order to preserve the benefits or
potential benefits intended to be made available to participants, in the event
of merger, consolidation, reorganization, the sale of all or substantially all
of the assets of the Company, recapitalization, reclassification, stock splits,
stock dividends or similar events.
The holder of an Award will have no rights as a stockholder with respect to
any shares of Common Stock covered by such Award until the date the Common Stock
relating to such Award is issued and delivered to such holder.
VOTING INFORMATION FOR THE PROPOSAL
The affirmative vote of the holders of a majority of the shares of the
Company's Common Stock present in person or represented by proxy and entitled to
vote at the Annual Meeting is required to approve the amendment to the Long-Term
Plan.
RECOMMENDATION
The Board believes that adoption of the amendment of the Long-Term Plan is
advisable to increase the share authorization for stock-based plans.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT TO THE LONG-TERM
PLAN.
APPROVAL OF THE AMENDMENT
OF THE QUIXOTE CORPORATION
1991 DIRECTOR STOCK OPTION PLAN
The Board of Directors has adopted, subject to approval of the stockholders,
an amendment to the 1991 Director Stock Option Plan (the "Director Plan"). The
amendment increases the aggregate number of shares available for grant under the
Director Plan from
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539,445 shares to 659,445 shares, an increase of 120,000 shares, to assure that
an adequate number of shares is available for grant during the remaining term of
the Director Plan. There are currently 48,000 shares available for grant under
the Director Plan. The Director Plan expires August 19, 2001. No other amendment
is being made to the Plan.
On September 10, 1999, the Board of Directors approved an amendment to the
Director Plan which deleted a provision stating that no Director could be
granted options for more than 90,000 shares during the term of the Plan.
Stockholder approval was not required for this amendment.
The purpose of the Director Plan is to provide the Company's Directors with
an opportunity to increase their equity ownership in the Company and thereby tie
their economic interests to other stockholders' interests. The Company's Board
of Directors and management believe that properly designed options for the
Company's Common Stock also provides a valuable inducement to qualified persons
to become and remain affiliated with the Company as Directors. The Company's
management believes that the Company's future success and profitability will
depend to a great extent on its ability to continue to attract and retain highly
qualified individuals as Directors.
Because the granting of options under the provisions of the amended Director
Plan will be entirely within the discretion of the Board of Directors or a
committee designated by it, it is not possible to designate the number of
options to be granted to individual Directors under the amended Director Plan.
It is expected that the number of optionees under the amended Director Plan will
not exceed six persons. In fiscal 1999, there was one grant to each Director of
options to purchase 12,000 shares of Common Stock at $12.19 per share.
The following is a summary of the principal provisions of the Director Plan.
Capitalized terms used in this summary which are not defined herein have the
meanings ascribed to them in the Director Plan. A copy of the Director Plan will
be available at the forthcoming Annual Meeting of Stockholders or in advance of
the meeting to any stockholder to whom this Proxy Statement is furnished upon
written or oral request directed to: Joan R. Riley, Secretary, Quixote
Corporation, One East Wacker Drive, Chicago, Illinois 60601; telephone number
(312) 467-6755.
GENERAL INFORMATION
Under the Director Plan, the Board of Directors is authorized to grant
options to Directors subject to limitations of the Plan. The Director Plan
provides that any option requires continued service as a Director for at least
one year from the date of grant as a condition of exercise, and such options may
thereafter be exercised as the Board of Directors determines; provided, however,
that Directors may exercise options in the event of a change-in-control of the
Company, notwithstanding the fact that he or she has failed to serve as a
Director for one year from the date of grant.
The purchase price of the shares covered by an option granted under the
Director Plan cannot be less than 100% of the current market price of the shares
at the date of grant. Current market price is deemed to be the average of the
daily closing prices of the Common Stock for the 30 consecutive business days
before the date of grant.
The Director Plan gives the Board the discretion to determine when options
may be exercised. Options granted under the Director Plan cannot have a term of
more than ten years. Only Directors who are also employees of the Company are
eligible to receive incentive stock options (ISOs) within the meaning of the
Internal Revenue Code under the Director Plan. See the discussion regarding ISOs
at page 14, "Awards Under the Long-Term Plan".
There are currently six Directors eligible to participate in the Director
Plan. An optionee electing to exercise an option must, at the time of exercise,
pay the full price of the shares
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being purchased. Payment of the purchase price may be made in cash or in the
Company's Common Stock valued at fair market value on the date of exercise. In
the event of a change in control of the Company (as defined in the Plan), the
Director Plan currently gives each optionee the right, within 30 days of such
change in control, to exercise his options whether or not the option is
otherwise exercisable.
SCOPE OF THE DIRECTOR PLAN
The Director Plan provides that an aggregate of 539,445 shares of the
Company's Common Stock are available and reserved for delivery on account of
options granted pursuant to the Plan. If an option expires or terminates without
having been exercised, the shares of Common Stock associated with that option
shall become available for other option grants. The amendment adds 120,000
shares of the Company's Common Stock to the Director Plan to be reserved and
available for delivery on the account of options.
PLAN ADMINISTRATION
The Plan shall be administered by a Committee appointed by the Board of
Directors of the Company which shall consist of all members of the Board of
Directors unless the Board names other individuals to serve on the Committee.
The Committee shall from time to time, at its discretion, recommend to the Board
of Directors with respect to option grants and proposed optionees.
Interpretation and construction of the provisions of the Plan or of any option
granted pursuant to it by the Committee are final unless otherwise determined by
the Board of Directors. No member of the Board of Directors or the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any option granted thereunder.
AMENDMENT AND TERMINATION OF THE PLAN
Options may not be granted under the Director Plan after August 19, 2001.
The Board of Directors may from time to time, insofar as permitted by law,
suspend, discontinue, revise or amend the Director Plan in any respect
whatsoever except that, without the approval of the stockholders, no such
revision or amendment shall: (1) change the number of shares subject to the
Director Plan; (2) change the designation of the individuals eligible to receive
options; (3) decrease the price at which options may be granted; (4) remove the
administration of the Director Plan from the Committee; or (5) extend the period
during which options may be granted. The Board of Directors is specifically
directed to revise, modify or amend the Director Plan, without the approval of
the stockholders, as may be necessary to satisfy the requirements of the
Internal Revenue Code, as amended, to assure that the Options granted thereunder
may be treated as ISOs. Termination of the Director Plan will not affect any
options then outstanding.
VOTING INFORMATION FOR THE PROPOSAL
The affirmative vote of the holders of a majority of the shares of the
Company's Common Stock present in person or represented by proxy and entitled to
vote at the Annual Meeting is required to approve the amendment to the Director
Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT TO THE DIRECTOR
PLAN.
18
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES OF OPTIONS
GRANTED UNDER THE LONG-TERM AND DIRECTOR PLANS
The following discussion is intended as a brief summary of the federal
income tax treatment of the Options granted under the Long-Term Plan and the
Director Plan (together, the "Plans"), under the laws and regulations in effect
as of the date of this proxy statement.
The granting of a Non-Qualified Option authorized under the Plans will not
be a taxable event. Non-Qualified Options include options which do not qualify
as ISOs. When a Non-Qualified Option is exercised, the optionee generally will
be taxed on an amount of compensation income equal to the excess of the market
value of the option shares at the time of exercise over the amount paid for such
shares. However, under certain circumstances, the income of an optionee who
exercises a Non-Qualified Option and is subject to Section 16(b) of the
Securities Exchange Act of 1934 (the "1934 Act") may be measured on the basis of
the market value of the Option shares as of the date the sale of the option
shares at a profit is no longer subject to suit under Section 16(b) of the 1934
Act, unless the optionee makes an election under Section 83(b) of the Internal
Revenue Code of 1986, as amended (the "Code"), within thirty (30) days of the
exercise of the Non-Qualified Option. Upon the sale or other disposition of
Non-Qualified Option shares, the difference between the proceeds received and
the sum of the option price plus the compensation income recognized as described
above will be capital gain or loss. While compensation income is subject to
federal income tax at a maximum rate of 39.6%, capital gains recognized by
individuals are now taxed at various rates. Capital losses will be deductible
against capital gains, if any, plus up to $3,000 of an individual's other
income; individuals may carry forward any unused capital losses indefinitely.
The Plans authorize the granting of ISOs to key employees of the Company.
ISOs are intended to qualify as "incentive stock options" as defined in Section
422 of the Code. Generally, the optionee recognizes no income on the grant or
the exercise of an ISO. If the shares acquired by the exercise of an ISO are
disposed more than two years from the Grant Date and more than one year from the
date of exercise, the optionee will recognize a capital gain or loss measured by
the difference between the sale proceeds and the option price. If the ISO shares
are sold before the end of the above described holding periods, however, the
optionee will recognize compensation income in an amount equal to the difference
between the lesser of the market value of the shares on the date of exercise or
the sale price of such shares and the Option Price, with the balance of any
remaining gain taxed as capital gain.
In the year of exercise of an ISO, an individual optionee must increase his
or her alternative minimum taxable income by an amount equal to the difference
between the market price of the Company Common Stock subject to the ISO on the
date of exercise and the option price for purposes of computing liability for
the alternative minimum tax. A taxpayer's alternative minimum taxable income is
subject to the alternative minimum tax, which can now be as high as 28% but is
payable only to the extent it exceeds the taxpayer's regular income tax.
The maximum tax rate applicable to long-term capital gains from the sale or
exchange of capital assets, such as option shares acquired under the Plans is
20%. However, individuals in the 15% income tax bracket (e.g., for the 1998 tax
year, single filers with $25,350 or less of taxable income or married persons
filing jointly with taxable income of $42,350 or less) will pay tax at a maximum
rate of 10% on their long-term capital gains recognized after May 6, 1997. The
maximum rate on long-term capital gains will be reduced to 18% (8% for
individuals in the 15% income tax bracket) for assets sold or exchanged after
December 31, 2000, and held for more than five years; however, the 18% rate will
only apply to the disposition of assets acquired after December 31, 2000, and
for purposes of determining eligibility for this lower rate, the holding period
of option shares will begin on the date that the option is
19
<PAGE>
granted. The lower tax rates provided by the 1997 Tax Act will also apply for
purposes of the alternative minimum tax.
Optionees may, at the discretion of the Committee in the case of the
Long-Term Plan, or the Board in the case of the Director Plan, pay all or part
of the exercise price for their Options by delivering Company Common Stock
already owned by them. Based on a Revenue Ruling published by the Internal
Revenue Service, if shares of Company Common Stock already owned by an optionee
are used to pay the exercise price of a Non-Qualified Option, no gain or loss
will be recognized with respect to the disposition of the previously owned
shares. However, the tax basis of the shares delivered as payment will carry
over to the shares received upon the exercise of the Option, share for share, to
the extent the number of shares received equals the number of shares delivered
as payment. The optionee will recognize ordinary income equal to the fair market
value on the exchange date of the balance of shares received in the exchange
(the number of shares received in excess of the number of shares delivered). The
tax basis of these shares will be equal to the taxable income recognized by the
optionee in the exchange.
Under proposed Treasury Department Regulations, an optionee who exercises an
ISO by surrendering previously acquired Company Common Stock generally will not
recognize taxable gain or loss upon the exchange. The optionee's tax basis of
the shares delivered as payment will carry over to the equivalent number of
shares received and the tax basis in the remaining shares will be zero. All
shares received will be subject to the holding period restrictions applicable to
ISOs; upon the disposition of any such shares prior to the expiration of these
holding periods, the shares with the lowest tax basis will be deemed to be
disposed of first. If payment of the exercise price of an ISO is made with
Company Common Stock acquired by an earlier exercise of an ISO that has not been
held by the optionee for the applicable holding periods, the optionee will
recognize ordinary income to the same extent as if the surrendered stock had
been sold in a premature disposition of shares subject to an ISO, but will
realize no capital gain or loss in the exchange. However, the stock acquired by
this exercise of an ISO will qualify for favorable tax treatment.
The Company will be entitled to claim a tax deduction for the amount of
compensation income recognized by an optionee upon the exercise of a
Non-Qualified Option. No such deduction will be available to Company as the
result of the exercise of an ISO unless the ISO shares are sold or disposed
before the relevant holding periods expire, in which case the Company would be
allowed a tax deduction equal to the compensation income recognized by the
optionee.
Neither the Long-Term Plan nor the Director Plan is qualified under Section
401 of the Code or is subject to any provisions of the Employee Retirement
Income Security Act of 1974.
APPROVAL OF AUDITORS
The Directors have recommended that the stockholders approve
PricewaterhouseCoopers LLP, a certified public accounting firm, as independent
auditors for the Company. A representative of PricewaterhouseCoopers LLP is
expected to be present at the Annual Meeting and will have an opportunity to
make an independent statement if he or she desires to do so. The representative
is expected to be available to respond to appropriate questions.
The affirmative vote of the holders of a majority of the outstanding shares
of the Company's Common Stock represented at the meeting and entitled to vote is
necessary to approve PricewaterhouseCoopers LLP as the Company's auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE APPROVING PRICEWATERHOUSECOOPERS
LLP AS THE COMPANY'S AUDITORS.
20
<PAGE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The chart below sets forth, as of September 19, 1999 information to the best
of the Company's knowledge with respect to the persons who beneficially owned in
excess of five percent of the Company's Common Stock; the total number of shares
of the Company's Common Stock beneficially owned by each Director and named
Executive Officer; and the total number of shares of the Company's Common Stock
beneficially owned by the Directors and Executive Officers of the Company, as a
group.
<TABLE>
<CAPTION>
AMOUNT APPROXIMATE
BENEFICIALLY PERCENTAGE(%)
NAME OF BENEFICIAL OWNER OWNED (1) OF CLASS (1)
- -------------------------------------------------- ------------- -------------
<S> <C> <C>
Brinson Partner, Inc. (2)......................... 604,200 7.5
FMR Corp.(3)...................................... 576,700 7.1
Wisconsin State Investment Board(4)............... 506,100 6.3
Investment Counselors of Maryland(5).............. 496,000 6.1
Dimensional Fund Advisors(6)...................... 481,300 5.9
J. L. Kaplan Associates(7)........................ 430,200 5.3
Philip E. Rollhaus, Jr.(8)........................ 405,053 5.0
Leslie J. Jezuit.................................. 158,085 2.0
Daniel P. Gorey................................... 63,419 *
Joan R. Riley..................................... 47,611 *
James H. DeVries(8)............................... 202,501 2.5
William G. Fowler(9).............................. 151,612 1.9
Lawrence C. McQuade............................... 52,500 *
Robert D. van Roijen, Jr.......................... 41,500 *
George D. Ebersole(10)............................ 70,095 *
Directors and Executive Officers as a group (9
persons including those individuals named
above)(8)(9).................................... 1,192,376 14.7
</TABLE>
- ------------------------
* Less than one percent (1%).
(1) The shares reported in the above table include shares of Common Stock which
can be acquired within 60 days of September 19, 1999, through the exercise
of options ("Option Shares") as follows: Mr. Rollhaus - 145,500 shares; Mr.
Jezuit - 94,298 shares; Mr. Gorey - 23,000 shares; Ms. Riley - 29,334
shares; Mr. DeVries - 60,500 shares; Mr. Fowler - 60,500 shares; Mr. McQuade
- 50,500 shares; Mr. van Roijen - 35,500 shares; and Directors and Executive
Officers as a group - 499,132 shares. Each individual's Option Shares are
also included in the number of shares of the Company issued and outstanding
for purposes of calculating the percentage ownership of each individual in
accordance with the rules and regulations of the Exchange Act. Certain of
these persons also have options not exercisable within 60 days of September
19, 1999, by which they can acquire the following additional shares of
Common Stock: Mr. Rollhaus - 56,333 shares; Mr. Jezuit - 80,147 shares; Mr.
Gorey - 50,000 shares; Ms. Riley - 30,666 shares; Mr. DeVries - 23,000
shares; Mr. Fowler - 23,000 shares; Mr. McQuade - 23,000 shares; Mr. van
Roijen - 23,000 shares; and Directors and Executive Officers as a group -
309,146 shares. These shares are not included in the above table or in the
percentage ownership calculations.
(2) Based upon information set forth in a Schedule 13G filed February 11, 1999.
Fidelity Management & Research Company, a wholly-owned subsidiary of FMR
Corp., is the beneficial owner of the listed shares as a result of acting as
investment adviser to various investment companies. The listed shares are
owned by one investment company, Fidelity Low-Priced Stock Fund (the
"Fund"). The address for FMR Corp. and the Fund is 82 Devonshire Street,
Boston, Massachusetts 02109.
21
<PAGE>
(3) Based upon information set forth in a Schedule 13G filed February 16, 1999.
Brinson Partners, Inc. ("BPI") is an indirect wholly-owned subsidiary of UBS
AG which is identified as an indirect beneficial owner of the listed shares
by reason of its ownership of BPI and UBS (USA) Inc., a parent holding
company of BPI. The address for Brinson Partners, Inc. is 209 South LaSalle,
Chicago, Illinois 60604-1295. The address for UBS AG is Bahnhofstrasse 45,
8021, Zurich, Switzerland.
(4) Based on information set forth in a Schedule 13F filing for the period
ending June 30, 1999. The address for the Wisconsin State Investment Board
is P.O. Box 7842, Madison, Wisconsin 53707.
(5) Based upon information set forth in a Schedule 13F filing for the period
ending June 30, 1999. The address for Investment Counselors of Maryland is
803 Cathedral Street, Baltimore, Maryland 21201.
(6) Based upon information set forth in a Schedule 13G filed February 11, 999.
Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, furnishes investment advice to four investment companies and serves
as investment manager to certain other investment vehicles (the
"Portfolio"). In its role as investment advisor and investment manager,
Dimensional possesses both voting and investment power over the listed
shares. All listed shares are owned by the Portfolio and Dimensional
disclaims beneficial ownership of all such shares. The address for
Dimensional is 1299 Ocean Avenue, Santa Monica, California 90401.
(7) Based upon information set forth in a Schedule 13F filing for the period
ending June 30, 1999. The address for J. L. Kaplan Associates is 222
Berkeley Street, Suite 2010, Boston, Massachusetts 02116.
(8) Messrs. Rollhaus and DeVries may be deemed to be the beneficial owner of
1,000 and 5,492 shares of Common Stock, respectively, owned by their family
members. These shares are not included in the above table. Messrs. Rollhaus
and DeVries disclaim beneficial ownership of these shares.
(9) Mr. Fowler has a beneficial interest in 890 shares of Common Stock held by
his retirement plan. These shares are not included in the above table.
(10) Mr. Ebersole retired from the Company on December 31, 1998.
22
<PAGE>
MISCELLANEOUS
STOCKHOLDER PROPOSALS FOR THE ANNUAL MEETING TO BE HELD IN 2000
Under the rules and regulations of the Securities and Exchange Commission,
proposals of stockholders intended to be presented at the Annual Meeting to be
held in 2000 must be received by the Company on or before May 15, 2000, to be
considered for inclusion in the Company's proxy statement relative to that
meeting. The persons named in the Board's proxy for the 2000 Annual Meeting will
be entitled to exercise the discretionary voting authority conferred by such
proxy on any shareholder proposal which is not included in the Company's Proxy
Statement if the shareholder making such proposal does not give the Company
notice before May 15, 2000. Such proposals should be in writing and sent to Ms.
Joan R. Riley, Secretary - Quixote Corporation, One East Wacker Drive, Chicago,
IL 60601.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and Executive Officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Executive
Officers, Directors and greater than ten percent shareholders are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on review of the copies of such reports furnished to the
Company and written representations that no other reports were required during
fiscal year 1999, the Company believes that all Section 16(a) filing
requirements applicable to the Company's Officers and Directors and ten percent
shareholders were complied with by such persons.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
The Company will be pleased to make its Annual Report on Form 10-K, as filed
with the Securities and Exchange Commission, available without charge to
interested parties. Written requests for the report should be directed to Ms.
Joan R. Riley, Secretary - Quixote Corporation, One East Wacker Drive, Chicago,
IL 60601.
23
<PAGE>
SKU#0524-PS-99
<PAGE>
DETACH HERE
PROXY
QUIXOTE CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) Philip E. Rollhaus, Jr. and Joan R. Riley
as proxies with full power of substitution and hereby directs them to vote
the stock of the undersigned at the Annual Meeting of Stockholders of Quixote
Corporation to be held in the Assembly Room at The Northern Trust Company, 50
South LaSalle Street, Chicago, Illinois, Tuesday, November 23, 1999, at 10:00
a.m. Central Standard Time, and at any adjournments thereof, as indicated on
the proposals set forth on the reverse side of this Proxy.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED, OR IF NO
DIRECTION IS INDICATED, IT WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS AND
"FOR" PROPOSALS 2, 3 AND 4. Discretionary authority is conferred by the Proxy
to vote on all matters, other than those specified on the reverse side, which
may properly come before the meeting or any adjournment thereof.
PLEASE COMPELTE, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
- --------------- ---------------
| SEE REVERSE | | SEE REVERSE |
| SIDE | CONTINUED AND TO BE SIGNED ON REVERSE SIDE | SIDE |
- --------------- ---------------
<PAGE>
- ------------------ ----------------
VOTE BY TELEPHONE VOTE BY INTERNET
- ------------------ ----------------
It's fast, convenient, and immediate! It's fast, convenient, and your vote
Call Toll-Free on a Touch-Tone Phone is immediately confirmed and posted.
1-800-PRX-VOTE (1-877-779-8683)
FOLLOW THESE FOUR EASY STEPS: FOLLOW THESE FOUR EASY STEPS:
1. Read the accompanying Proxy 1. Read the accompanying Proxy
Statement/Prospectus and Proxy Card. Statement/Prospectus and Proxy Card.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). http://www.eproxyvote.com/quix
For shareholders residing outside
the United States call collect on 3. Enter your 14-digit Voter Control
a touch-tone phone 1-201-536-8073. Number located on your Proxy Card
above your name.
3. Enter your 14-digit Voter Control
Number located on your Proxy Card 4. Follow the instructions provided.
above your name.
4. Follow the recorded instructions.
YOUR VOTE IS IMPORTANT! YOUR VOTE IS IMPORTANT!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/quix
anytime!
DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET
DETACH HERE
PLEASE MARK
/X/ VOTES AS IN
THIS EXAMPLE.
1. Election of Directors:
NOMINEES: (01) Philip E. Rollhaus, Jr. and (02) Leslie J. Jezuit
FOR WITHHELD
/ / / /
/ / _______________________________________
For both nominees except as noted above
FOR AGAINST ABSTAIN
/ / / / / /
2. Approving the amendment of the 1993
Long-Term Stock Ownership Incentive Plan.
3. Approving the amendment of the 1991 / / / / / /
Director Stock Option Plan.
4. Approving the selection of / / / / / /
PricewaterhouseCoopers LLP as
independent auditors of the Company.
5. Transaction of such other business as may properly come before the meeting
and any adjournments thereof.
MARK HERE FOR MARK HERE IF YOU
ADDRESS CHANGE / / PLAN TO ATTEND / /
AND NOTE AT LEFT THE MEETING
Please date and sign as name is imprinted hereon, including designation as
executor, trustee, etc. if applicable. A corporation must sign in its name by
the president or other authorized officers. All co-owners must sign.
Signature:_________________________________________ Date:____________________
Signature:_________________________________________ Date:____________________
